UNDP and GIZ collaborate to promote the transition towards a circular economy in Viet Nam
November 1, 2023
Ha Noi, 1 November 2023 - A circular economy aims to preserve the value of products, materials, and resources for as long as possible; however, one of the key challenges in achieving circularity at scale is the lack of information on the quantity and quality of available waste and recycled materials.
To replace virgin materials with secondary ones, the United Nations Development Programme (UNDP) and the Viet Nam Circular Economy Hub have started implementing a pilot initiative for a secondary material marketplace. This activity is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
The initiative aims to facilitate the exchange of waste and recycled resources in the plastics and textiles sectors, thereby supporting sustainable and effective business practices. The technology-based marketplace application will be piloted to enable online trading, providing a more accessible and user-friendly marketplace for sellers and buyers. Within the material market, a network of material and service suppliers, manufacturers, and recyclers will be established to create more opportunities to exchange secondary materials and propose a more transparent and competitive marketplace. Interested companies can sign up to participate in this pilot by contacting UNDP. The secondary materials being exchanged on the platform could ultimately be certified and standardised to ensure the highest social standards.
According to the Ministry of Industry and Trade, in 2022, the production of the Vietnamese plastic industry accounted for 9.54 million tons, and the domestic demand for plastic products increased at a 10.6% rate annually. However, the domestic market does not provide sufficient materials. As such, Viet Nam is also the third largest importer of plastic scrap after Malaysia and Hong Kong, importing almost 290,000 tonnes in 2019. In the same year, the total capacity of plastic materials provided by national producers only met 20% of domestic demand. At the same time, other estimates indicate that up to 77% of plastic is imported from international sources.
Concerning the textile sector, the country exported a total of 29.5 billion USD in 2020, making it the 3rd largest clothing exporter worldwide after China and Bangladesh. It is estimated that 10%-25% of the fabric used in garment manufacturing in Viet Nam ends up as post-industrial waste, which is -at best- down-cycled and exported as filling materials for, among others, soft furnishings, but also still, to a large extent, incinerated and landfilled. Looping recycled material back into production more effectively can meet emerging demands from key consumer markets and brands and make Viet Nam more independent from imported fibre and fabric for its garment industry. ; however, the domestic market is not providing sufficient materials. Viet Nam is also the third largest importer of plastic scrap after Malaysia and Hong Kong, importing almost 290,000 tonnes in 2019.
At the forefront of the circular economy transition in Viet Nam, UNDP has been advising the Government of Viet Nam on sustainable development and has introduced CE in key policy frameworks such as in the Revised Law on Environmental Protection, the upcoming National Action Plan on Circular Economy while investing in several programmes to build the capacity of Vietnamese SMEs to transform their business models, recognising that business stands at the core of the circular transitions as vehicles to drive responsible consumption and production.
“Piloting a marketplace for secondary materials in Viet Nam represents a first step in the country's journey toward a circular economy. By leveraging the expertise of both organisations, we will make this pilot successful in generating insights and building the groundwork essential to the emergence of a well-functioning and transparent market for secondary materials in Viet Nam. Developing and nurturing strategic partnerships is essential to bring the necessary transformation throughout entire value chains. This was the rationale for setting up the Viet Nam Circular Economy Hub, and today, we are delighted to welcome GIZ as a new partner of the CE Hub”, said Mr Dao Xuan Lai, Head of the Climate Change and Environment Unit, UNDP Viet Nam.
“Developing a circular economy in Viet Nam requires collaboration from all actors, public and private sector. It also requires an integrated approach across ministries and the private sector to establish an adapted framework and create new circular business models. On behalf of the German Government and in close collaboration with our partners, GIZ is supporting Viet Nam with our experience in Circular Economy in and outside the country. Since the best solutions for industries usually come from within, we hope to build and sustain the secondary material marketplace as a B2B solution in close collaboration with the business sector. For this important work, as GIZ, we are looking forward to cooperating with UNDP in Circular Economy and therefore jointly contributing to developing a greener economy in Viet Nam”, said Mr. Dennis Quennet, Programme Director Sustainable Economic Development, GIZ Viet Nam.
For more information, please contact:
Phan Huong Giang
Media and Communications Analyst, Climate Change and Environment
United Nations Development Programme
Information for the editor
GIZ has been advising Viet Nam on macroeconomic reforms for 30 years, including policy processes such as the Green Growth Strategy and the Green Taxonomy. Moreover, GIZ Viet Nam has longstanding networks with the private sector through cooperation projects on sustainable economic development, among others, with the textiles sector. GIZ is currently working to enhance the circularity in the textiles sector through mapping recyclers, developing an industrial waste tracking tool, and piloting recycled textile product innovations with companies along the value chain. As host of the PREVENT Waste Alliance, an international think- and do-tank for a circular economy, GIZ can also leverage the expertise on digital circular solutions for plastics of the various PREVENT members worldwide.
About the Viet Nam CE Hub
Launched in October 2021 by the United Nations Development Programme (UNDP) with the Institute of Strategy, Policy on Natural Environment (ISPONRE) of MONRE, the Viet Nam Circular Economy Hub aims to enhance dialogue, generate know-how, and mobilise collective action towards the CE transition. As the first government-led platform on CE, included in Decree 08/2022/ND-CP, the CE Hub aims to raise awareness and build the capacity of all stakeholders (public authorities, businesses, civil society, and academia), to adopt CE principles, creates synergies and integrates financial and technical resources.
The CE Hub counts four strategic partners: the Netherlands Embassy, the Norwegian Embassy, the Finland Embassy and GIZ. The CE Hub welcomes approximately 1,500 unique visitors monthly and has developed a network of over 65 active members.